We have used patch clamp techniques to investigate the effects of two important classes of inhibitory neuropeptides on electrical excitability of the molecular level in a tumor cell line from rat pituitary. Both classes of neuropeptides inhibit dihydropyridine-sensitive calcium channels and stimulate charybdotoxin-sensitive potassium channels by reversing the effects of cyclic AMP-dependent phosphorylation at a step distal to cyclic AMP synthesis or degradation. Experiments with phosphatase inhibitors and purified enzymes implicate the polycation- stimulated phosphoserine protein phosphatase 2A as the final common effector on both types of channel proteins. Natriuretic peptides activate phosphatase 2A through a cyclic GMP-dependent protein kinase. Many other neuropeptides, like somatostatin, that act through pertussis toxin-sensitive G-proteins, stimulate phosphatase 2A through a lipoxygenase metabolite of arachidonic acid. Subsequently, we have obtained evidence that three other neurotransmitters, adenosine, dopamine and enkephelin, activate the same pathway as somatostatin. Furthermore, we have identified two other classes of ion channels that are regulated by protein phosphatases: the non-selective cation channels that are stimulated by calcium but inhibited by dephosphorylation, and the inwardly rectifying potassium channels that set the cells' nesting potential.